Investing in Submarine Cables Increases the Profits of Major Companies
Does investing in submarine cables really increase the profits of major companies and strengthen their dominance over the internet??
Data is transferred between different countries via submarine cables that span approximately 1.3 million kilometers,
and most of these cables were previously under the control of public entities and telecommunications companies.
With the rush of major technology companies to invest in the field of fiber optic cables, these cables have gradually come under the control of these tech giants, to the point where experts have stated that their growing investment in this field increases their dominance over the internet at every step, as well as their profit margins.
The four companies' control over the cables:
Initially, all fiber optic cables were owned and controlled exclusively by telecommunications companies and public entities.
Over time, Microsoft, Alphabet, Meta (Facebook), and Amazon — four of the world's largest technology companies — entered this investment field, and by around 2012 the four companies collectively owned approximately 10% of the cables.
From 2012 to the present, their investment share has grown significantly to approximately 66% of total cables.
It is also expected that by 2024 this share will increase further, with the quartet holding significant stakes in more than 30 submarine cables spanning thousands of kilometers,
according to a study conducted by "Télé Géography", a company specializing in the study of wired and wireless communications.
It is likely that within the next three years, the four aforementioned companies will come to dominate the capital and ownership of the submarine cable network that transmits internet data between various countries of the world.
Giants' investment has reduced costs
Despite experts' confirmation that they expect the four tech giants to take control of the fiber optic cables, it has also been noted that as the scale of these companies' investments began to grow, the cost of transmitting data across oceans dropped significantly.
According to the same previously mentioned source "Télé Géography", major technology companies contributed significantly to a rise in the volume of international internet data transmission to approximately 41% during 2020.
The giant quartet cooperates in funding this project
Researchers have observed through various studies that there is cooperation among the four companies
regarding the funding of submarine cables. For example:
Meta, Microsoft, and Telxius — a subsidiary of the Spanish telecommunications company — collaborated
to fund the "MAREA" cable, which stretches approximately 6,500 kilometers and was completed in 2017.
And this is not the only instance of cooperation — there have been many occasions when these companies have collaborated
to fund submarine cables, and it has been said that the cooperation between these tech giants
ensures continuous data flow in a flexible manner under all circumstances.
Especially since the cables are susceptible to damage and failure,
frequently — and according to reports, this occurs more than 200 times per year.
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